I initiated regular coverage of the biotech industry at Forbes, and wrote many of the early stories on genomics, personalized medicine, and the automation of drug making. I also launched the Arabic edition of Forbes, and oversaw what became highly influential lists in the Middle East, such as the 50 Most Powerful Arab Businesswomen. Qaddafi's daughter really wanted to be on it, and George Bush mentioned the list at the World Economic Forum. In between, I helped my father, a nephrologist, form a start-up that develops software to assist general practitioners in diagnosing patients. It is part of the exciting new field of health information technology, and it is going to shape the way we interact with our doctors.
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The Staggering Cost Of An Epic Electronic Health Record Might Not Be Worth It

Judy Faulkner once walked into a roomful of hospital CIOs, tossed her macramé handbag on a table, and announced she came to decide who she wanted as customers. Faulkner doesn’t do marketing. The formidable founder of electronic health records Epic Systems boasts an enviable roster of customers made up of prestigious hospitals and academic centers. She has quietly convinced them that her product is best: a single, seamless database—the fruit of a company that has grown organically, and shunned acquisitions. And, because it is no small task to deploy, she is there all the way to hand-hold jittery CIOs, and help them get millions of dollars in government subsidies by showing meaningful use of her EHR.

Her not-for-profit clientèle will need every penny of those taxpayers’ dollars, but they won’t cover anywhere near the staggering cost of an Epic EHR. Duke UniversityHealth System will shell out $700 million, so will Boston-based Partners HealthCare; University of California, San Francisco will pay $150 million. Customers, such as New Hampshire’s Dartmouth-Hitchcock Medical Center are feeling the pinch. DHMC which implemented Epic last year at a cost of $80 million, expects a weak operating performance in 2012, partly because of expenses related to Epic.

As it is, hospitals are not in great financial shape. In addition to the HITECH Act which calls for the adoption of EHRs, hospitals face increased capital spending because of new ObamaCare rules, and changes in Medicare reimbursement. Moody’s expects rating downgrades to exceed upgrades this year, and Standard & Poor’s forecasts operating performance to deteriorate.

With those significant outlays, hospitals will ultimately be passing on the cost of their pricey EHRs to their patients. Some IT decision-makers, such as Ryan Champlin of Cook Children’s Healthcare System, also question whether an Epic EHR is going to buy better health. Champlin passed on Epic.

Hospitals don’t need to saddle themselves with an expensive legacy system. In a piece published last week in the New England Journal ofMedicine, Isaac Kohane and Kenneth Mandl, argued that “EHR vendors propagate the myth that health IT is qualitatively different from industrial and consumer products in order to protect their prices and market share and block new entrants. In reality, diverse functionality needn’t reside within single EHR systems, and there’s a clear path toward better, safer, cheaper, and nimbler tools for managing health care’s complex tasks.”

Kohane and Mandl are both physicians who oversee the informatics program at Boston Children’s Hospital, which uses a combination of vendors that include Cerner, Epic, and “best-of-breed” software.

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Software companies are a mirror of their customers. Their customers reflect the health care system that is costing our children’s future as we bankrupt state and federal budgets and lead the world by a million miles in health care driven bankruptcies. This is a system that has no correlation between price and quality. It’s a system that is stove-piped just like Epic and the other software companies profiting from the flawed system. It also reflects that their customers have lived in a health care bubble. Automating a totally screwed up system is expensive. Epic’s price tag is “epic” as a result. Maybe their inflated price tag will accelerate the bubble bursting as we have far too much duplication and health care has been a supply driven market.

Clay Christensen laid out how our current healthcare system is a “mainframe” system delivering care in the most expensive possible manner. If health care organizations were smart, they’d take the $700 million they are spending on automating what’s flawed and put it into scrappy internal startups that can utilize their mothership’s resources but deliver care in a more efficient model.

Hospitals are buying it because they don’t know any better. There is horrible herd mentality in healthcare and CIOs are choosing Epic because “it’s what Kaiser uses”. The earlier commenter was correct in that the name of the game will have to be innovation.

Epic is by far the best out there, but their business model is more like a consulting company (charging $150/hour to have a recent college grad implement a system over the course of 2-3 years). One of the reasons I left was because of this model. It burns out employees (average tenure of an implementer is roughly 1.5 yrs) and leads to inefficiency (every Epic application team has at least 1 person who has never done it before) and the same fee for service model that does not encourage quality (a strong and efficient system) over quantity (hours worked/billed to customer).

There is a self-fulfilling aspect to this — other egs might be VHS (vs betamax) and blueray (vs HD). Once you hit a tipping point, not only difficult for others not to follow, but arguably more sensible for others to follow.

There is no comparison to video formats and EHRs. There are over 400 meaningful use certified EHRs deployed throughout the US, and Epic just happens to be profiling and actively seeking out only the ‘deep pockets’ clients. Just wait until the healthcare IT bubble bursts in two years – and all the HITECH incentive money goes away – and all these hospitals who invested so heavily in this software will find them selves in rather difficult position financially. As Zina noted, the opportunity cost of spending money on overpriced IT has to be passed on somewhere. Unfortunately, that is the patient.

I work for in a small family practice. One MD and one NP. We started using Epic a little over a year ago. We all hate it. Frankly life has been hell since starting. It was supposed to make life easier,use less paper, none is true. Not user friendly, lots of repetition,lots of use of the “accept” button. We always are having issues and calling the help desk, getting a ticket number and having someone call back sometime… If this is the best EMR out there….well… that just stinks!!!